# How Long Does It Take to Pay Off a Credit Card?

The average credit card debt in America is around \$5,000, so if you’re carrying a balance, you’re not alone. But how long will it take you to pay it off? It depends on a few factors.

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## Introductory Paragraph

Assuming you don’t make any more charges on your credit card, here are the number of months it would take you to pay off your balance based on your monthly payment.

If you make only the minimum payment each month, it will take you longer to pay off your credit card balance and you will pay more in interest. The table below shows how long it would take to pay off a \$2,000 balance with a range of monthly payments, and the total interest paid with each monthly payment.

## Minimum Payments

Making only the minimum payment each month will prolong the life of your debt and increase the amount of interest you pay. The table below shows how long it would take to pay off a \$2,000 balance with different minimum payments and at different interest rates.

It would take nearly 19 years to pay off the debt making only minimum payments, and you would end up paying more than \$4,000 in interest charges. If you increased your monthly payment to \$50, you could pay off the debt in less than three years and save more than \$1,000 in interest charges.

Interest Rate | Minimum Payment | Time to Pay Off Debt | Total Interest Paid
————--|—————--|———————|———————
5% | \$40 | 19 years | \$4,091
10% | \$40 | 11 years | \$2,721
15% | \$40 | 8 years | \$2,047

## The Debt Snowball Method

The debt snowball method is a debt reduction strategy where you pay off debts in order of smallest to largest, gaining momentum as you knock out each balance. The strategy is named for the “snowball” effect it creates as you gain momentum to tackle larger debts.

Paying off your smallest debt first may not save you the most money in interest payments, but some personal finance experts believe the psychological benefits are worth it. When you see progress being made on your debt, it can keep you motivated to stay on track with your plan.

To use the debt snowball method, list your debts in order from smallest balance to largest. Make the minimum payments on all your debts except the one with the smallest balance. Attack that debt with everything you’ve got until it’s paid off, then move on to the next one on your list.

As you pay off each debt, you’ll have more money available to put toward the next debt on your list. That’s where the “snowball” effect comes in – each success makes it easier to tackle the next goal.

## The Debt Avalanche Method

The debt avalanche method is the fastest and most effective way to pay off your credit card debt.

With this method, you list your debts from highest interest rate to lowest. You make the minimum payments on all of your debts except the one with the highest interest rate.

You put as much money as you can towards paying off the debt with the highest interest rate while still making the minimum payments on your other debts. Once that debt is paid off, you move on to the next debt on your list and continue this process until all of your credit card debt is paid off.

The debt avalanche method will save you the most money in interest payments and will get you out of debt the fastest.

## The Balance Transfer Method

The balance transfer method is the quickest way to pay off a credit card. You transfer the balance of your credit card onto another card with a 0% APR introductory rate. This gives you a set period of time—usually between 12 and 21 months— during which you can pay off your debt interest-free.

To find out how long it will take you to pay off your credit card using the balance transfer method, divide your outstanding balance by your monthly payment. Then, multiply that number by the length of the intro period (in months).

For example, let’s say you have a \$3,000 balance on a credit card with an 18% APR and you want to transfer it to a new card with a 0% APR for 18 months. Your monthly payment would be \$150 (3,000 ÷ 20 = 150).

If you make the minimum payment of \$150 every month, it will take you 20 months to pay off your debt—2 months longer than the intro period. This means you’ll end up paying \$600 in interest (\$30 per month x 20 months).

But if you can swing it, paying more than the minimum payment will help you get out of debt faster. In our example, if you pay \$250 per month, it will take you 13 months to pay off your debt—5 months shorter than the intro period. And you’ll only pay \$300 in interest (\$15 per month x 20 months).

## The Snowball vs. Avalanche Debate

There are two popular methods for paying off credit card debt: the Avalanche and the Snowball. Which method is best for you depends on a number of factors, including your debt level, your interest rates, and your psychological approach to debt repayment.

The Snowball Method
With the Snowball method, you focus on paying off your smallest balance first, while making minimum payments on your other debts. Once your smallest debt is paid off, you move on to the next smallest balance, and so on. The advantage of this approach is that it can help you stay motivated by seeing quick results. As you knock out one balance after another, you’ll feel like you’re making progress and that can encourage you to keep going.

The Avalanche Method
With the Avalanche method, you focus on paying off your debt with the highest interest rate first, while making minimum payments on your other debts. Once that debt is paid off, you move on to the next highest interest rate, and so on. The advantage of this approach is that it saves you money in the long run by tackling your most expensive debt first. By paying off high-interest debt first, you’ll pay less in interest over time even though you may not see results as quickly as with the Snowball method.

## Conclusion

In conclusion, the answer to the question “How long does it take to pay off a credit card?” depends on many factors. By taking a few minutes to calculate your own individual factors, you can get a pretty good idea of how long it will take you to pay off your credit card. Just remember, the sooner you start paying off your credit card, the better!